Regulators, like Caesar’s wife, must always be above suspicion

livemint.com:

Subscribe to enjoy similar stories. More than four weeks after US-based short-seller Hindenburg Research fired a salvo at the chairperson of India’s capital markets regulator Securities and Exchange Board of India (Sebi), Madhabi Puri Buch, the controversy over her alleged role in the story refuses to die down.

In a fresh attack, the Indian National Congress has alleged that Agora Advisory, a consulting business she owns 99% of, earned fees from regulated entities under Sebi’s purview even after her appointment to the regulator’s chair. It has held this up as a pointer to a conflict of interest, even as the said entities denied that they had sought preferential treatment from the capital-markets regulator.

Earlier, India’s principal opposition party had accused Buch of receiving ₹2.17 crore in rental income from another regulated entity, which was under investigation for insider trading. According to a 10 August note from Hindenburg, Buch owned 100% of a Singapore-based consultancy Agora Partners from 2013 to 2022, a period that covered the time she was a full-time member of the Sebi Board, and transferred its ownership to her husband Dhaval Buch only on 16 March 2022, more than two weeks after taking charge as Sebi’s chairperson.

Buch denied the charges of impropriety made by Hindenburg, but is yet to respond to the Congress’s allegations. This episode, however, cannot be dismissed as just another storm in a teacup.

Sure, she has said that the existence of these consulting companies and her shareholding in them were an explicit part of her disclosures to Sebi and that she has nothing to hide. While this may well be so, the reality is that when it comes to regulators, the line between the personal and the public is very